Govt mulls JV for airports' rejig

AAI may get 10% of revenue share from Kolkata and Chennai as against 45.99% in Delhi and 38.7% in Mumbai.

In a proposal that could annoy its Left supporters, the government is considering the joint venture route for modernising the Kolkata and Chennai airports, where the Airports Authority of India would be a minority shareholder, with a private consortium as the lead partner.

Further, the AAI may get only 10 per cent of gross revenue share from Kolkata and Chennai as against 45.99 per cent in Delhi and 38.7 per cent in Mumbai.

"The equity infusion by AAI for Chennai and Kolkata joint venture companies has been estimated as approximately 50 per cent of the equity investment in case of Delhi and Mumbai. The equity infusion by AAI during 2008-09 to 2013-14 will be Rs 150 crore," official sources said.

The equity share of private players together with borrowings would be about Rs 5,550 crore, sources said, indicating that AAI could retain only a minority stake in the two joint ventures.

The Prime Minister's Committee on Infrastructure had earlier mandated that Kolkata and Chennai airports would be developed through the Public-Private-Partnership route on the model followed for Delhi and Mumbai airports.

It has been assumed that the restructuring process of Kolkata and Chennai airports would be completed by March 31, 2008.

However, Civil Aviation Minister Praful Patel said the route towards modernisation of the two airports would be taken only after talks with the Left parties and UPA ally DMK, ruling the two states.

The modernisation of Kolkata and Chennai airports would require about Rs 5,700 crore investment between 2008-09 and 2013-14, half of what has been envisaged in Delhi and Mumbai.

The AAI is also projected to receive upfront payments of Rs 175 crore from the Kolkata and Chennai joint venture companies, part of which is proposed to be utilised in the development of non-metro airports.

In comparison, the AAI would be getting Rs 300 crore upfront payments from Delhi and Mumbai airport JVs.

In Delhi and Mumbai, AAI has 26 per cent stake in the joint venture. It would be contributing an equity of Rs 302 crore out of the total Rs 11,400 crore investment required.

The GMR and GVK-led consortium in Delhi and Mumbai respectively would have to arrange the remaining Rs 11,100 crore through internal resources and market borrowings.

Expenditure and revenue projections on the Chennai and Kolkata airports have been based on the assumption that these would be transferred to JVCs by April 1, 2008.

The Kolkata and Chennai airports are being modernised to cope up with the increase in passenger and cargo traffic.

According to official estimates, passenger traffic at Kolkata airport is expected to touch 52.24 lakh in 2009-10 from 34.94 lakh in 2004-05.

In Chennai, passenger traffic is projected to rise to 89.11 lakh in 2009-10 from 56.33 lakh in 2004-05.

The Left parties, while welcoming private-foreign participation in greenfield airports, have been insisting that the ownership of the existing metro airports should remain with AAI and not be transferred to private parties.